OREANDA-NEWS. Duke Energy today announced second quarter 2013 adjusted diluted EPS of USD 0.87, compared to USD 1.02 for second quarter 2012, and reported diluted  EPS of USD 0.48, compared to USD 0.99 for the same period last year.
Reported results include special items that are excluded from the company’s adjusted  diluted EPS results. Special items for the second quarter 2013 primarily include USD 0.26  per share in charges related to a write-off of investment balances in Crystal River 3, USD 0.08 per share in charges related to a write-off of nuclear development costs, USD 0.07  per share in merger costs to achieve, and USD 0.04 per share in charges for litigation  reserves related to the company’s former investment in Crescent Resources.

On an adjusted EPS basis, U.S. Franchised Electric & Gas, the company’s largest  business unit, overcame milder weather to post favorable results in the second quarter  of 2013 primarily due to the addition of Progress Energy’s utility operations. However,  these results were offset by the impact of share dilution from the merger and lower  quarterly results at both the Commercial Power and International Energy business units.

Additionally, the company reaffirmed its 2013 adjusted earnings guidance range of  USD 4.20 to USD 4.45 per share and expects stronger adjusted earnings in the second half of  the year as the company implements revised customer rates and continues to achieve  efficiencies from the merger transaction. 

“After one year, we have had tremendous success coming together as one , stronger company,” said President and CEO Lynn Good. “We’re delivering on our promises to  customers, shareholders and our communities. We continue making progress with our  near-term priorities, positioning Duke Energy for long-term financial and operational  success.

“We are on track to achieve our 2013 adjusted diluted earnings per share guidance  range of USD 4.20 to USD 4.45. We are keenly focused on achieving our financial objectives,  supported by realizing constructive regulatory outcomes, maximizing cost efficiencies  from our merger, and optimizing the performance in all of our operations,” she said.

BUSINESS UNIT RESULTS

The discussion below of second quarter results includes adjusted segment income,  which is a non-GAAP financial measure. The tables on pages 22 through 25 present a  reconciliation of reported results to adjusted results.
U.S. Franchised Electric and Gas (USFE&G)
USFE&G recognized second quarter 2013 adjusted segment income of USD 590 million,  compared to USD 337 million in the second quarter 2012, an increase of USD 0.36 per share. USFE&G’s increased results were primarily driven by the addition of Progress Energy’s  regulated utility operations in the Carolinas and Florida and merger savings at these  operations (+USD 0.38 per share).

Other drivers included:

Increased pricing and riders (+USD 0.02 per share) primarily related to the
implementation of revised customer rates in Duke Energy Ohio’s regulated  electric  operations and energy efficiency programs in the company’s regulated business
Lower operations and maintenance expenses primarily driven by the reduced  number of nuclear outage days and the achievement of merger synergies (+USD 0.02  per share)
These results were partially offset by milder weather (-USD 0.05 per share) and a decrease  in the Allowance for Funds Used During Construction (AFUDC) equity primarily due to  the completion of certain major capital projects (-USD 0.02 per share).

International Energy

International Energy recognized second quarter 2013 adjusted segment income of USD 87  million, compared to USD 105 million in the second quarter 2012, a decrease of USD 0.03 per share.
International Energy’s quarterly results decreased primarily due to lower volumes  resulting from an extended planned maintenance outage at National Methanol
Company (-USD 0.02 per share).

Commercial Power

Commercial Power recognized a second quarter 2013 adjusted segment loss of USD 3 million, compared to adjusted segment income of USD 32 million in the second quarter  2012, a decrease of USD 0.05 per share.
Commercial Power’s quarterly performance decreased primarily due to lower results  from the Midwest coal and gas generation fleets (-USD 0.07 per share) principally due to
lower PJM capacity revenues, lower generation volumes and the prior year recovery of  a previously written-off receivable from Lehman Brothers.

Other

On an adjusted basis, Other primarily includes corporate interest expense not allocated  to the business units, results from Duke Energy’s captive insurance company, other  investments, and quarterly income tax levelization adjustments.
Other recognized second quarter 2013 adjusted net expense of USD 57 million, compared  to adjusted net expense of USD 18 million in the second quarter 2012, a difference of USD 0.06 per share. Other’s results were primarily due to the addition of interest expense on
Progress Energy holding company’s corporate debt (-USD 0.03 per share) and increased  Duke Energy holding company interest expense (-USD 0.02 per share).
Share Issuance

On July 2, 2012, Duke Energy issued approximately 258 million shares of common  stock in connection with the closing of the merger with Progress Energy Inc. The  issuance of these additional shares had a dilutive impact of USD 0.37 per share on the  quarter-over-quarter adjusted diluted EPS results.